Industry commends PIM’s Research on life insurance penetration

Last week at a simple ceremony where the country’s Insurance Ombudsman Dr. Wickrema Weerasooria and the President of the Insurance Association of Sri Lanka (IASL) were present, Dilini Ratnayake an MBA student of the Postgraduate Institute of Management (PIM) presented to the IASL President a copy of her recent research study on the reasons why the penetration of life insurance in Sri Lanka is still very low compared with other Asian countries.

The research study also contains recommendations which if implemented by the industry as a whole and by individual insurance companies, will increase such penetration in the country resulting in a greater awareness and a greater number of life policies.

Also present at the presentation of the Research Study were Chula Hettiarachchiand and Hashra Weerawardena.

Ratnayake, a final year MBA candidate at PIM and an executive officer in the Life Division of Ceylinco Insurance, had been selected for this Research Study by the Postgraduate Institute of Management (PIM). She had earlier presented her proposal as part of the curriculum of her MBA studies at PIM and the proposal had been accepted by the PIM. One of the reasons for such acceptance was that not enough meaningful research had been done on why life insurance penetration in Sri Lanka was quite low not amounting to even 10 to 12 per cent.

In that context Ratnayake’s Research proposal was accepted by PIM’s Director Professor Uditha Liyanage as part and parcel of PIM’s Research program which earns Academic points and units in its MBA award.  As the Supervisor of her Research Study, Professor Liyanage was able to persuade Dr. Weerasooria, who is a Senior Faculty Member of the PIM and also a member of PIM’s Board of Studies and Board of Management, to be Ratnayake’s supervisor. This selection was made primarily because Dr. Weerasooria’s also the country’s Insurance Ombudsman and has for several years been advocating the need for more research being done to find out why Life insurance Penetration is low in Sri Lanka and the steps that may be taken to overcome this situation.

At the ceremony when the Research study was presented to IASL President Ramal Jasinghe, Dr. Weerasooria as Sri Lanka’s Insurance Ombudsman stated that he was happy to have functioned as Ratnayake’s supervisor in this Research.

He said that many students now avoid research and opt for assessment only by examination. Dr. Weerasooria said “This trend was regrettable because research – whatever the field – develops your mind and also your writing skills.” He added that in his professional and academic life, research had been an excellent building block.

He also said that Ratnayake’s research on life insurance penetration in Sri Lanka was the best study on the subject he has seen up to date for Sri Lanka.

While it catered to the requirements of good research in the context of an excellent literature review, methodology and analysis of relevant questionnaires and interviews, the subject of the research was of great practical value and importance to our insurance industry, namely why is life insurance not popular among our people? Is it because people do not want it or because people do not know enough about it?  Or is it because insurance agents who are the main marketers of life insurance restrict their marketing to the Western province and the urban areas of the country? It is well known that as a product insurance “is sold and not bought”. In that context, 95% of life insurance is sold by Agents. Are they penetrating into the more distant and remote areas of the country? In Dr. Weerasooria’s view, Ratnayake’s research has addressed these issues.

As the Insurance Ombudsman while congratulating. Ratnayake for her innovative study, Dr. Weerasooria called on the insurance industry to publicise this study and make it available for the use of all the insurance companies currently marketing life policies.

Speaking on behalf of the insurance industry, Jasinghe thanked Dr. Weerasooria for having arranged this presentation and acknowledged the contribution this Research study could make to insurers. Jasinghe recounted that he was also a product of the PIM and he was fully aware of the excellent quality of Research undertaken at the PIM. He was also appreciative that the PIM had waived their copyright to this research study and is now enabling the country’s Insurance industry to make full use of it and its findings for their benefit. In that context, Ratnayake agreed to supply IASL with a complete soft copy of the Research Study and Jasinghe undertook to bind and put together over twenty copies of it and make one copy at least available to the twenty insurance companies currently engaged in business in the country. Jasinghe also said that he would send copies of the study to the country’s regulator, the Insurance Board of Sri Lanka and also endeavor to place some of the study’s major findings and recommendations on the IASL’s web-site.

Chula Hettiarchchi of Asian Alliance who chairs the IASL’s Committee on Creating Greater Awareness of Insurance also spoke and welcomed this Research Study as a major contribution to their on-going work.

He also acknowledged that Ratnayake had sought the views of those marketing life policies and he himself had been interviewed by her when this research was being done. Hence it could be said that this study has captured the current practices on marketing life policies and would therefore be of great practical benefit.

Hettiarchchi added that if insurance companies engaged in life insurance should use this study for their Training and Marketing purposes as well. He said that one should focus on the identification of the shortcomings and the recommendations in the study to promote life insurance.

In conclusion, Ratnayake responded by acknowledging PIM’s support to her in her MBA program and the special assistance given to her by Professor Liyanage and Dr. Weerasooria  to complete this research study successfully. She also thanked the insurance industry and her own employer for enabling her research in a more efficient and speedier manner and said that while she had improved her career considerably by this study, she hoped it would benefit the insurance industry even in a small way.